Marcus Hutchins at his workstation in Ilfracombe, England. He was arrested in Las Vegas after attending an annual hacking conference.
Photograph: Frank Augstein/AP

Marcus Hutchins, the 23-year-old British security researcher who was credited with stopping the WannaCry outbreak in its tracks by discovering a hidden “kill switch” for the malware, has been arrested by the FBI over his alleged involvement in separate malicious software targeting bank accounts.

According to an indictment released by the US Department of Justice on Thursday, Hutchins is accused of having helped to create, spread and maintain the banking trojan Kronos between 2014 and 2015.

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The Kronos malware was spread through emails with malicious attachments such as compromised Microsoft Word documents, and hijacked credentials such as internet banking passwords to let its user steal money with ease.

Hutchins, who is indicted with another unnamed co-defendant, stands accused of six counts of hacking-related crimes as a result of his alleged involvement with Kronos. “Defendant Marcus Hutchins created the Kronos malware,” the indictment, filed on behalf of the eastern district court of Wisconsin, alleges.

He was arraigned in Las Vegas late Thursday afternoon and made no statement in court beyond mumbling one-word answers in response to a few basic questions from the judge.

A public defender noted that Hutchins had no criminal history and had cooperated with federal authorities in the past. The court-appointed attorney said Hutchins needed more time to hire a private attorney. Hutchins, who asserted his fifth amendment right to remain silent, was ordered to remain detained until another hearing on Friday.

His mother, Janet Hutchins, told the Press Association it was “hugely unlikely” that her son was involved because he has spent “enormous amounts of time” combating such attacks. She said she was “outraged” by the charges and had been “frantically calling America” trying to reach her son.

At the courthouse, a friend of Hutchins, who declined to give his name, said he was shocked to hear about the arrest.

“There’s probably a million different scenarios that could have played out to where he’s not guilty,” he said. “I’m definitely worried about him.”

The special agent in charge, Justin Tolomeo, said: “Cybercriminals cost our economy billions in loses each year. The FBI will continue to work with our partners, both domestic and international, to bring offenders to justice.”

Hutchins’ co-defendant advertised the malware for sale on AlphaBay, a darknet marketplace, the indictment alleges, and sold it two months later. The encrypted website operated like an extralegal eBay for drugs and malware, with independent sellers offering their products in exchange for payment in a number of cryptocurrencies such as bitcoin. It was not clear from the indictment if the malware was actually sold through AlphaBay.

The marketplace was shut down on 20 July, following a seizure of its servers by US and European police including the FBI and the Dutch national police. The FBI’s acting director, Andrew McCabe, said AlphaBay was 10 times as large as the notorious Silk Road marketplace at its peak.

When the site was taken down, its servers were seized, giving authorities a window into activity on the site. The operation included the arrest on 5 July of the suspected AlphaBay founder, Alexandre Cazes, a Canadian citizen detained on behalf of the US in Thailand. Cazes, 25, died a week later while in Thai custody.

The security researcher Ryan Kalember, from Proofpoint, says that the Kronos malware was notable for being a particularly slick, and expensive, offering. “It had nice remote administration, with a dashboard panel, and it was quite good at evading attention by antivirus products,” he said. It was sold on malware forums for prices of up to $7,000 (£5,330), according to Kalember; the indictment against Hutchins lists prices of $2,000 (£1,523) and $3,000 (£2,284).

New Kronos infections continued as late as 2016, when the malware was repurposed into a form used to attack small retailers, infecting point-of-sale systems and harvesting customers’ credit card information.

“A lot of us thought of Kronos as crimeware-as-a-service,” Kalember said, since a Kronos buyer would also be getting “free updates and support” and that “implied there’s a large group behind it”.

This could very easily be the FBI mistaking legitimate research activity with being in control of Kronos infrastructure

Ryan Kalember, security researcher

He also warned that the actions of a researcher examining the malware can look very similar to those of a criminal in charge of it. “This could very easily be the FBI mistaking legitimate research activity with being in control of Kronos infrastructure. Lots of researchers like to log in to crimeware tools and interfaces and play around.”

On top of that, for a researcher looking into the world of banking hacks, “sometimes you have to at least pretend to be selling something interesting to get people to trust you”, he said. “It’s not an uncommon thing for researchers to do and I don’t know if the FBI could tell the difference.”

Hutchins, better known online by his handle MalwareTech, had been in Las Vegas for the annual Def Con hacking conference, the largest of its kind in the world. He was at the airport preparing to leave the country when he was arrested, after more than a week in the the city without incident.

The security researcher became an accidental hero in May when he registered a website he had found deep in the code of the ransomware outbreak that was wreaking havoc around the world, including disrupting operations at more than a third of NHS trusts and bodies.

The site, it turned out, acted as a kill switch for the malware, which stopped infecting new computers if it saw that the URL had been registered.

When WannaCry first appeared, in early May, it spread rapidly, infecting hundreds of thousands of computers worldwide in less than a day, encrypting their hard drives and asking for a ransom of $300 in bitcoin to receive the decryption key. It moved particularly quickly through corporate networks thanks to its reuse of a security exploit, called EternalBlue, first discovered by the NSA before being stolen and leaked by an allegedly Russian-linked hacking group called the Shadow Brokers.

Both US and UK intelligence agencies later linked the malware outbreak to North Korean state actors, who have become bolder in recent years in using cyber-attacks to raise revenue for the sanction-laden state.

Hutchins was recently given a special recognition award at the cybersecurity celebration SC Awards Europe for halting the WannaCry malware. The malware ended up affecting more than 1m computers, but without Hutchins’ apparent intervention, experts estimate that it could have infected 10-15m.

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Hutchins’ employer, the cybersecurity firm Kryptos Logic, had been working closely with US authorities to help them investigate the WannaCry malware. Hutchins handed over information on the kill switch to the FBI the day after he discovered it, and the chief executive of the firm, Salim Neino, testified in front of the US House of Representatives committee on science, space and technology the following month.

“The largest success, though incomplete, was the ability for the FBI and NCSC of the United Kingdom to aggregate and disseminate the information Kryptos Logic provided so that affected organizations could respond,” Neino told the committee.

Hours after Hutchins was arrested by the FBI, more than $130,000 (£100,000) of the bitcoin ransom taken by the creators of WannaCry was moved within the bitcoin network for the first time since the outbreak. There is nothing to suggest the withdrawal, which appears to have moved the coins into a “mixer”, a digital money-laundering system, is connected to the arrest of Hutchins.

Dan Hernandez contributed reporting

• This article was amended on 9 August 2017. An earlier version said a video demonstrating the Kronos malware was posted on 13 June. This has been corrected to 13 July 2014.